In Depth

Caution: Stats May Be Slippery

Peril permeates a steel mill. Molten metal explodes when exposed to water. Overhead cranes hoist steel coils weighing up to 80,000 pounds. Heavy vehicles roll within feet of high-voltage wires. "We have a work environment that presents every hazard known to man," says Alan H. McCoy, vice-president and spokesman at AK Steel in West Chester, Ohio.

In the face of these challenges, AK Steel (AKS) last year achieved what appears to be the nearly impossible. The company, which had sales of $4 billion, recorded only 15 injuries among 6,500 employees—its safest year ever. Between 1994 and 2009, it slashed annual injuries reported to the federal government by 96%. According to data compiled by the U.S. Labor Dept. it is more dangerous to serve coffee at Starbucks or count currency as a bank teller than it is to maneuver massive metal slabs at AK Steel.

Across industrial America, employers are making extraordinary assertions about safer conditions for the nation's 14 million factory workers. The overall rate of injuries has fallen 48% in a decade. "Employers are doing more to improve workplace safety," says Marc Freedman, executive director of labor law policy at the U.S. Chamber of Commerce in Washington.

Now, however, the Occupational Safety & Health Administration, which until recently also praised the claimed improvements, admits to having second thoughts. "The statistics we have on workplace injuries are incomplete and, in some cases, inaccurate," says David Michaels, the newly appointed Assistant Secretary of Labor who heads OSHA. Suspecting that safety achievements may have been exaggerated at some industrial companies, his agency is stepping up investigations to identify bogus injury numbers.

Michaels' suspicions were fueled by a report critical of OSHA issued in November by the Government Accountability Office, a nonpartisan congressional research agency. Based on interviews with physicians, occupational health experts, and others, the GAO found that some employers underreport injuries to reduce insurance premiums. Without identifying particular companies, the GAO also found that some workers fail to report broken arms and gashed legs because they fear being fired—a concern intensified by difficult job market conditions. As of last year, "OSHA's efforts to verify the accuracy of the data [were] not adequate," the GAO concluded.

Susan Baker, a professor at the Johns Hopkins Bloomberg School of Public Health and a scholar of workplace injuries, agrees that safety improvements appear to have been overblown. "It is extremely unlikely that injury rates would plummet like this," she says.

About 1.5 million U.S. companies with 10 or more employees must report work-related injuries and illnesses to the government if they require more than minimal first aid. Without accurate reporting, OSHA can't readily identify potential hazards, possibly leading to broader risks for more workers.

That's what some union leaders allege is going on at Caterpillar (CAT), the $32 billion maker of construction equipment based in Peoria, Ill. On paper, Caterpillar has trimmed its rate of workplace injuries by 81% since 2003. "We believe all accidents and injuries are preventable, therefore our goal for these is zero," the company says on its Web site.

The United Auto Workers, which has an acrimonious history with Caterpillar, counters that a lot of the improvement stems from the company's tendency to punish workers who say they were hurt on the job. "The extent of Caterpillar's blame-the-worker safety program is frightening," the UAW Local 974 newsletter asserted in its December 2008 issue. The local represents workers at Caterpillar's Peoria plant. "This unacceptable practice is carried out for one reason only—to intimidate workers and 'improve' safety statistics," the union newsletter added.

Asked about the union allegations, a Caterpillar spokeswoman said in a written statement that the company "is committed to the health and safety of our employees." The statement added that Caterpillar has "made improvements to our post-injury investigation processes to fully identify the root cause of injuries, accidents, and near misses, and [has] increased the sharing of best health and safety practices across the company to leverage the lessons learned."

AK Steel presents another case study of questionable safety claims, according to some current and former workers. The company instituted new safety policies after 10 fatalities at its facilities from 1993 through 1996 led to an OSHA fine of $1.9 million. One side effect of this switch, the current and former workers say, was that some employees who reported injuries were cited for rule violations. "At the steel mill, you don't turn the small or medium injuries in, or else you get time off [without pay]," says Jeff Repper. He recently retired after working for 30 years at a variety of blue-collar jobs in the company's mill in Middletown, Ohio. "That's probably the biggest difference in the [injury] numbers," he adds.

Scott James, who also retired recently after 30 years at the Middletown plant, says that in 2001 he slipped on ice at the factory and fractured his wrist. When he returned with a splint the next day, he told his manager he had fallen at home. Three years later he suffered a leg burn the size of a silver dollar after molten metal splashed inside his protective clothing. Again, he opted to treat the wound on his own. "I didn't want to risk being punished," he says.

Asked about these accounts, AK Steel's McCoy says that not reporting an injury is an "extraordinarily serious offense" that can hinder the company from preventing other harm. "We find it not to be credible that someone would not report a serious injury out of fear of being disciplined," he adds. Five out of the 15 workers who had reportable injuries last year faced discipline to reinforce proper behavior, he says. "We make no apologies for our safety program and all of its components, including discipline." AK Steel spends millions of dollars outfitting employees with the most effective safety gear, McCoy says. Each mill has safety coordinators who receive suggestions from workers, and morning meetings start with a review of safety issues. "We have a total commitment from the very top of the organization that is demonstrated every single day," he adds.

Injuries that workers do bring to the company's attention don't always get reported to OSHA, some current and former employees say. On Feb. 16, 2005, Beverly Adkins was unloading coal from railcars at AK Steel's Ashland (Ky.) plant. This task required her to swing a sledgehammer and lift heavy latches on railcar doors. Halfway through her shift, Adkins says, she felt a searing pain in her shoulder. She went immediately to the company infirmary. Later she was diagnosed with a torn rotator cuff and underwent surgery.

AK Steel determined that the injury was not work-related. Adkins hired a lawyer and challenged the company before a state administrative law judge in Kentucky. The judge sided with her, and the company appealed. In 2008, the litigation reached the Kentucky Supreme Court, which ruled against AK Steel. Frustrated by the years of legal wrangling, Adkins says she then settled with AK Steel under a confidential agreement requiring the company to pay her medical costs.

Despite four separate rulings that Adkins' injury had occurred as a result of work, her shoulder tear has never appeared on AK Steel's injury logs, which the company provided to Bloomberg BusinessWeek. "I couldn't understand how they would say the injury was not work-related," says Adkins, now 64.

AK Steel says it disagrees with the rulings and believes the underlying cause of Adkins' injury wasn't related to work. Because of this, McCoy says, AK Steel wasn't obliged under OSHA rules to report the injury. "Kentucky OSHA has reviewed our logs numerous times since that incident and has never raised a question," says McCoy. "If this is viewed as evidence that we are trying to manipulate our injury numbers, we would take offense to that."